TSMC has confirmed mass production at its Japanese wafer fab, marking a significant milestone in its overseas expansion strategy amid geopolitical uncertainties. While its Japan project advances smoothly, the company faces varying degrees of success and challenges across its global operations.
Japan leads TSMC's overseas progress
TSMC's Japan Advanced Semiconductor Manufacturing (JASM) facility has begun mass production as scheduled in December 2024. In contrast, the company's Fab 21 in Arizona has experienced delays and is now set to commence 4-nanometer process production in 2025.
European venture advances despite political uncertainty
The European Semiconductor Manufacturing Company (ESMC), TSMC's European facility, has made substantial progress since beginning construction in August 2024. The project, which recently launched its official LinkedIn account showcasing the facility's architectural designs, aims to achieve mass production of 28-nanometer automotive and industrial-grade specialty chips by the end of 2027.
US operations secure major clients
TSMC's US plant has already garnered trust from prominent American clients, including Apple, Qualcomm, Nvidia, and AMD, due to its impressive yield rates. This progress comes as competitors Intel Corporation and Samsung Electronics continue working toward advanced process nodes such as 5-nanometer or 4-nanometer processes at their US facilities.
Cultural contrasts shape expansion success
The company's expansion beyond Taiwan has revealed stark contrasts in regional responses. While the Kumamoto fab in Japan received strong local support and achieved production targets ahead of schedule, the Arizona facility encountered various cultural challenges during construction despite its earlier start.
Political shifts pose new risks
Recent political developments in Germany have introduced additional uncertainty to TSMC's European ventures. While European Commission President Ursula von der Leyen's re-election ensures continued support for the EU's "Made in Europe" agenda under the European Chips Act, German Chancellor Olaf Scholz's position has weakened significantly. With Scholz now leading a caretaker government and facing dim prospects in the upcoming German federal election on February 23, 2025, the political landscape presents new challenges.
The political instability within the German government could potentially impact TSMC's regional operations and expansion plans. A fragmented political landscape might delay decision-making, affect funding allocations, or shift priorities away from semiconductor initiatives, potentially straining collaboration between TSMC and local authorities.